[Good Morning Stock Market] "European Markets Rebound Amid US Market Holiday... Korean Market Also Positive"

[Asia Economy Reporter Park Jihwan] The U.S. New York Stock Exchange was closed in observance of Thanksgiving Day. On the same day, European stock markets that operated normally all closed higher.

On the 25th (local time), the pan-European EuroStoxx50 index closed at 4293.24, up 0.40% from the previous day. The FTSE100 index of the London Stock Exchange in the UK ended trading at 7310.37, up 0.33%. Germany's Frankfurt Stock Exchange DAX30 index rose 0.25% to 15,917.98, and France's Paris Stock Exchange CAC40 index closed at 7075.87, up 0.48%.

This is interpreted as a result of bargain buying following six consecutive days of declines in European stock markets due to the impact of the COVID-19 spread, including mask mandates and restrictions on economic activities for unvaccinated individuals.

The fact that European stock markets all closed higher overnight is seen as positive for the domestic stock market. In particular, considering that most of the stocks that rose in the European markets were defensive sectors, it is advised to pay attention to utility-related stocks such as electricity, water, and gas in the domestic market.

◆ Seo Sangyoung, Researcher at Mirae Asset Securities = It is positive that European stock markets rose due to bargain buying while the U.S. market was closed. Despite the explosive increase in COVID-19 cases, only the automobile sector was sluggish, while some related stocks such as airlines rebounded, showing strength centered on defensive sectors including utilities. The Korean stock market should also focus on related stocks.

Additionally, the European Central Bank (ECB) announced through its monetary policy minutes that high inflation is expected to persist longer than anticipated. However, it also mentioned that the conditions for raising interest rates will not be met next year, indicating that the timing of rate hikes will not be early, which is favorable. Considering this, the Korean stock market is expected to start flat but is likely to rebound due to high expectations for bargain buying.

◆ Kim Seheon, Researcher at Kiwoom Securities = The Korean stock market is expected to show a firm but stable trend as it digests the previous day’s Monetary Policy Committee event and searches for the next major catalyst.

Although the foreign investors’ net buying trend focused on large-cap stocks, which had been continuous this week, weakened after the Monetary Policy Committee event, the rebound in European stock markets and the weakening trend of the dollar index while the U.S. market was closed are expected to be relatively favorable for foreign investor demand conditions in the Korean stock market today.

Additionally, as the U.S. market opening is awaited this evening, there is a possibility that expectations for improved consumer demand during Black Friday and the year-end shopping season will also be factored in. According to the National Retail Federation, this year’s U.S. year-end shopping season is expected to see a recovery in offline shopping compared to last year. Sales growth is also expected to increase by 8.5?10.5%, higher than the historical average of around 3%, so news flow related to the shopping season is expected to be positive for the stock market.